China: Ferrous scrap imports decrease by over 65% in H1CY'22

China witnessed a significant drop of 66% in ferrous scrap imports in H1CY'22 (January-June, 2022) at 100,555 tonnes (t) from 297,803 t in H1CY'21, as per customs data.

The drop in scrap imports was due to decreased consumption by the major EAF mills as H1 saw hot and rainy weather across the country that led to sluggish demand from finished steel end-users.

Meanwhile, the authorities restricted trade movements at ports to neutralise the COVID situation, which hampered mills' daily operations.

Similarly, on m-o-m basis, China's ferrous scrap imports stood at 14,423 t in June compared to 22,714 t in May, a sharp decline of 37% m-o-m.

Country-wise imports:

• Imports from Japan fall: Chinese mills imported 69,293 t of scrap from Japan in H1CY'22, a sharp drop of 68% as against 215,633 t in H1CY'21.
  
  

Similarly, on m-o-m basis, imports fell by 47% in June to 9,157 t from 17,161 t in the previous month due to increase in freight rates and limited demand.

• Imports from South Korea down: The country imported 19,062 t of scrap from South Korea in H1, down 69% as against 61,316 t in H1CY'21.
  
  

However, on m-o-m basis, imports from Korea increased by 13% m-o-m to 3,399 t in June as against 3,002 t in May.

Outlook
The continuous softening in both finished steel sales and demand may exert pressure on the imported and domestic scrap markets in China.